Sunday, February 20, 2005

Bankrupt

Jansen takes a look at the Bankruptcy reform act (previously mentioned here) and who could be affected in Maine.

The subject also is important to Mainers because the state has a high rate of bankruptcies. Some 4,497 Mainers declared bankruptcy during the fiscal year that ended June 30, 2004, according to the Administrative Office of U.S. Courts. About 90 percent filed under Chapter 7, with all but one of the rest under Chapter 13.

Total bankruptcies, including those involving businesses, hit 4,647 last year, up from 4,597 the year before and 4,352 the year before that.

Sen. Dick Durbin, D-Ill., criticized the credit-card companies for inviting customers to rack up debt - including the 3-year-old son of one of his staffers.

The bill does nothing to stop the abuses of bankruptcy by the wealthy and corporations, but strips away protections from low and middle-class Americans who are hit by unemployment or illness.

The bill was stopped once when Clinton, judging it unfair to consumers, refused to sign it and again in 2002 when it was first approved in the house and then defeated there after Senator Schumer (D-New York) managed to attach an amendment that would have prevented convicted anti-abortion terrorists from declaring bankruptcy to avoid paying court judgments. Democrats will again attempt to attach this amendment and others in order to stall the bill.

Both Snowe and Collins voted for the Schumer amendment after Republican leaders urged GOP senators to vote for the motion in order to deny Al Gore the tiebreaking vote. It will be interesting to see how they vote this year. Credit-card giant MBNA was by far the largest contributor to both senators in their last elections.